A lot of FDI enterprises declare huge losses

The findings is the result of the Government Inspectorate’s inspection of the observance of the law on taxes in the export processing zones and export processing enterprises in Hanoi, HCM City, Binh Duong and Dong Nai.

In December 2011, the authorities checked 399 businesses in export processing zones and detected 125 companies that declared losses in 2009 - 2011. Of these, there were 36 businesses declared losses in three consecutive years, totaling over VND2.8 trillion (nearly $150 million) and 69 other companies with losses of VND1.829 trillion in two consecutive years.

Notably, Sumitomo Bakelite Vietnam Co., Ltd., a wholly-Japanese-owned company based in the Thang Long Industrial Park in Hanoi had accumulated losses of more than VND777 billion ($41 million) in three years.

Also in Hanoi, Meiko Electronics Vietnam Co., Ltd. in Thach That District, Hanoi, had total losses in three years of more than VND300 billion (over $15 million). This firm was one of the 10 biggest FDI projects of Vietnam in 2006 and was the largest FDI electronics manufacturing project in Vietnam at the time of licensing.

The southern province of Dong Nai contributes four names on the list of FDI firms with big losses, including Toshiba Asia with a three-year accumulated losses of more than VND430 billion.

Ranking next in the list is Fujitsu Vietnam Limited Company with accumulated losses in 2 years of VND292 billion. After 13 years in Vietnam, this company has invested over $200 million and its export revenue reached nearly $500 million in 2006-2007.

Two remaining notable names are also in Dong Nai: Kureha Vietnam Co., Ltd. with three-year accumulated loss of VND264 billion and Olympus Vietnam Co., Ltd. with accumulated losses of VND256 billion in two years.

HCM City and Binh Duong contribute two representatives on the list, including Freetrend Industriala Vietnam in HCM City with a loss of over VND222 billion in two years and Saigon Stec in Binh Duong with accumulated losses of VND218 billion in 3 years.

Some companies declared losses but they kept expanding production and earned high turnover, inspectors said.

These firms are suspected of committing transfer pricing. However, the tax authorities cannot handle this situation because of lacking information.

Source:  VietNamNet